if you have a 4x4 it only works in 4lo. unless you do the grey wire mod. when you push the button the "diff lock" light will be solid red when on. when its not engaging it will be flashing. and like i said if its not working and your trying to engage it in 2wd or 4hi, it wont work anyways. search for grey wire mod in cheap tricks
Basically an open diff will spin the wheel with the LEAST amount of traction. (That's how you can go around corners without a major ordeal.) The outside tire has to spin much faster and travel much further than the inside tire. A locker will "lock" both rear wheels together so they both spin irreguardless of traction.
If you want to be sure that the locker is working, chuck the front wheels and lift the rear tires on the ground with a floor jack under the diff. Put the truck in neutral and spin one of the tires with your hand. If the locker is functioning properly, both tires will spin in the same direction. If the locker is not engaged, the tires will spin in opposite directions.